Is inorganic growth the way to go for Frasers Centrepoint Trust?

A one-two punch of headwinds threatens their growth.

After a lackluster season registering flat earnings, more concerns are banging on the property firm’s gates. Faced with a retail sales slowdown and a manpower crunch, can Frasers Centrepoint counterpunch with a robust inorganic growth?

According to RHB Research, Frasers Centrepoint’s very comfortable gearing level places it in a good position for an acquisition spree.

“Assuming gearing of 40%, we estimate debt headroom at S$468.6m. Medium-term growth will likely come from the acquisition of Waterway Point and NorthPoint extension from its parent once the malls are completed and stabilised,” RHB Research said.

It also awaits the commencement of Northpoint Shopping Centre in March 16, which will be completed in phases over 18 months.

However, compounding Frasers Centrepoint’s woes are a large supply of malls flooding the suburban space soon.